There are many people who are involved in jobs and projects without even considering if their contracts expire anytime soon. For those who are dealing with that sort of situation, it is always good to consider what needs to be done once a contract expires.
It’s therefore appropriate for us to define the word contract before we proceed any further.
What Is An Employment Contract?
An employment contract is in essence an agreement that is used for legal purposes, and it binds all parties involved. In most cases, these contracts will provide specific requirements stated by the employer in order for the employee to be paid for the services provided. Furthermore, it outlines the terms and conditions of working together whilst binding the parties to uphold their promise and provides an avenue for remediation through legal means if required for breach of contract.
Whilst there are other types of contracts, this is the most likely scenario for an employment contract.
What Is It That Makes An Employment Contract Legally Binding?
If a contract is not considered to be legally binding, there is no way to enforce what it contains to achieve the expected results. The contract needs to involve both an offer and the acceptance of the said offer. There should also be a clear ability and intention to decide to enter into this contract and this means both parties involved need to have the mental capacity to sign the contract.
What Are The Options When A Contract Is Expiring Soon?
There are two common ways for a contract to expire and they are both quite different. The most common one is when a specific date officially ends the contract. The second is when the contract is to end once a specific project or scope of work is delivered.
In any case, both parties can either decide to go their own separate ways or they can extend the contract for a new date or for new work requirements. Extending contracts is often a very good way to handle this if there aren’t too many changes in the contract terms.
If the terms and conditions vary significantly, the best approach is usually to create an entirely new employment contract. This is ideal in order to work on a project that is entirely different or for work requirements that are not the same as those of the expired contract.
What If The Contract Expired Already And We Want To Extend It?
Many people wonder if an expired contract can be extended, and the answer is yes. It is all a matter of both parties agreeing to extend the said contract and this ensures clarity when going through this process.
What If A Contract Ends But Both Parties Are Still Performing Their Obligations?
When this happens, this is what is known as an implied contract. What this means is that the behaviour and the actions of both parties reflect that they both intend to maintain a new legally bounding agreement.
Therefore, an expired contract can still be valid, and an assessment would need to be undertaken to determine its validity and enforceability. Typically, the courts will review the performance of the obligations by both parties and communication that would indicate a continuance of the expired contract despite the nominal expiry date.
Always Consult With Your HR Consultant
It is very important for you to take the time to look ascertain your legal obligations with an experienced HR Consultant. This is essential if you want to avoid any issues or technicalities that could jeopardise the validity and enforceability of the contract. Always remember that contracts can be complex to construct, and this is why the right experience is important.
Final Thoughts On Expired Contracts And Their Validity
There are many types of contracts, and they can be formulated in varying ways. The main thing to consider is if the contract ends due to a specific date or due to obligations being met.
It is the responsibility of the employer and the employee to be aware of the way the contract has been crafted. This is the best way to ensure that it can be extended or whether a new contract is needed in case both parties continue to work together.
At HR Expertise, our team of HR Consultants provides HR Consulting in Melbourne and across Australia to help navigate you through the process, call us today if you need assistance, we would love to work with you.